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California has more money than projected after admin miscalculated state budget

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Re: California has more money than projected after admin miscalculated state budget

#41

Post by anon291 »

dlcarrier wrote: post #29
pclowes wrote: post #7

This is wild. A mistake of this magnitude should result in several positions becoming vacant and many politicians being ineligible for any future offices. If a government can’t budget accurately everything else they do is likely even less competent. Every number and statistic they report should be treated with suspicion. Without clear data who is to say they are doing anything helpful at all?

The errors were all within the CalPERS pension fund. The pensions are guaranteed by the state, so the fund is notorious for a complete lack of fiduciary duty, and these types of errors track with the general quality of their operation.

Recall that funds like this are one of the largest owners of the hedge funds that drive up property values for American homes via their reckless speculation. The state (well states really -- CA is not alone) desperately needs to make more than market returns to guarantee their unfunded pension liabilities.

Re: California has more money than projected after admin miscalculated state budget

#42

Post by sgc »

dmitrygr wrote: post #8
sgc wrote: post #6

Given that school budgets are absolutely gutted with mass layoffs this year and next, and the miscalculation looks like 2/3 of the budget shortfall, hiding such a basic and impactful error requires a much better explanation than I see in that article. It looks like it was done to stifle debate about budget allocations, which would be necessary in the circumstances.

> Given that school budgets are absolutely gutted What now? https://edsource.org/2026/how-california-compares-to-other-s... https://educationdata.org/public-education-spending-statisti...

It is just a fact that California schools are laying off a large percentage of personnel and getting rid of many programs. Pink slips by the thousands have been sent out that will take effect in a couple months at the end of the school year. If you don't know that, you are not informed.

Those links are completely irrelevant because they are out of date. Budget had temporarily increased due to the availability of COVID funds, and now there is a very harsh snap in the other direction. Shortfalls are directly linked to actions by the Trump administration, and their downstream impacts. Every state needs to step up and deal with it.

Here is one example of how that is happening, it is a far more significant problem than just this: https://www.cde.ca.gov/nr/ne/yr25/yr25rel35.asp

Re: California has more money than projected after admin miscalculated state budget

#43

Post by aaomidi »

oatmeal1 wrote: post #39
sgc wrote: post #6

Given that school budgets are absolutely gutted with mass layoffs this year and next, and the miscalculation looks like 2/3 of the budget shortfall, hiding such a basic and impactful error requires a much better explanation than I see in that article. It looks like it was done to stifle debate about budget allocations, which would be necessary in the circumstances.

The education system seems one of the only places where vastly improving technology over the past 30 years has not translated to cost savings or improved outcomes.

Why would we expect schooling to get…cheaper?

The vast majority of the cost is hiring teachers. It should be staying in line with inflation or even increasing.

Re: California has more money than projected after admin miscalculated state budget

#44

Post by lotsofpulp »

Supermancho wrote: post #37
jaggederest wrote: post #10

Earlier quoted context omitted.

Oregon's kicker law is a textbook example of bad economic policy, sadly. It essentially means that in boom years the state can't accumulate any general funds for recessions, which is half of the point of a state-level political entity in the first place. Balanced budgets and pay as you go are fabulous over the medium term, but over the short term of a year or two during a disaster or recession, governmental spending…

> Oregon's kicker law is a textbook example of bad economic policy, sadly You must be talking about non-economic textbooks, otherwise this makes no sense.

Oregon has a biennial budget, so some Oregon employee predicts how much money Oregon will earn over the next 2 to 3 years (which is basically impossible to do), and then Oregon leaders have to come up with a spending plan equal to or less than that revenue estimate.

However, Oregon's costs have no relation to the revenue that the state predicted it would get, so it is constrains the solution space when unforeseen costs or cost trends happen. For example, Oregon predicts a certain amount of revenue, but gets 3% more than the predicted revenue, but that is because prices for everything went up 3% more than expected, now Oregon has less money than it needs to pay its expenses (since it has to return any revenue which was 2% over the estimate).

Oregon is the only jurisdiction I have ever heard of with this kind of strict refund law, and its rigidity seems to be the main issue, along with the 2 year forecast requirement (since forecasting even 1 year is hard enough).

Re: California has more money than projected after admin miscalculated state budget

#45

Post by RobRivera »

NewJazz wrote: post #16
codethief wrote: post #14

Related: In the German state of Baden-Württemberg they were miscalculating the number of active teachers for 20 years due to a software error, causing the state to employ 1440 fewer teachers than actually intended. https://www.spiegel.de/panorama/bildung/baden-wuerttemberg-s...

How is that related? That's a long term calculation error vs short term forecasting error.

From my point of view, the Jedi are a state-funded militia coded as a tax exempt non profit!

Re: California has more money than projected after admin miscalculated state budget

#46

Post by reassess_blind »

aaomidi wrote: post #43
oatmeal1 wrote: post #39

Earlier quoted context omitted.

The education system seems one of the only places where vastly improving technology over the past 30 years has not translated to cost savings or improved outcomes.

Why would we expect schooling to get…cheaper? The vast majority of the cost is hiring teachers. It should be staying in line with inflation or even increasing.

Not to mention there are more students.

Re: California has more money than projected after admin miscalculated state budget

#47

Post by mistrial9 »

reassess_blind wrote: post #46
aaomidi wrote: post #43

Earlier quoted context omitted.

Why would we expect schooling to get…cheaper? The vast majority of the cost is hiring teachers. It should be staying in line with inflation or even increasing.

Not to mention there are more students.

in California there are not more students.. all tiers of schools show falling enrollments, year after year. Except community colleges, where they have discovered that more than 15% of all students are ghost enrolled.

-- California K-12 public school enrollment fell by 74,961 students (a 1.3% decline) for the 2025-26 school year, marking the largest drop since the pandemic. This loss was significantly higher than the state’s Department of Finance projection of only 10,000 students.

The decline is driven by lower birth rates and a reduction in immigration, with the latter exacerbated by families fearing enforcement actions. Los Angeles County accounted for nearly half of the state's total loss, losing 32,953 students, largely due to a decrease in newcomer students within the LAUSD.

Private schools saw a steeper drop of 6.6%, while homeschooling declined by 3.7%. The enrollment drop is causing budget deficits, leading to staff layoffs, program cuts, and potential school closures. Hispanic students experienced the largest numeric loss (48,064), while white students saw the largest percentage decline (2.68%). English learner enrollment fell by 8.2%, partly due to reclassification and partly due to out-migration.

Re: California has more money than projected after admin miscalculated state budget

#48

Post by JumpCrisscross »

aaomidi wrote: post #43
oatmeal1 wrote: post #39

Earlier quoted context omitted.

The education system seems one of the only places where vastly improving technology over the past 30 years has not translated to cost savings or improved outcomes.

Why would we expect schooling to get…cheaper? The vast majority of the cost is hiring teachers. It should be staying in line with inflation or even increasing.

> vast majority of the cost is hiring teachers

My 1,500-student public California high school currently lists 7 administration-team members (principal, executive assistant, three assistant principals, school-facilities manager and food-services manager) and 11 administrative-support members (school data-processing specialist, print-center technician, senior-clerical assistant, separate registrar and attendance roles, interventions-support specialist, and others). That doesn't include 4 site maintenance, a network-support and a separate network-systems specialists; a separate media-library specialist; 2 psychologists; a college and career advisor; 4 school counselors; a wellness-space support specialist; and a social science and an athletic director.

34 administrative hires. One per 44 students. Many of those roles strike me as fluff.

Re: California has more money than projected after admin miscalculated state budget

#49

Post by JumpCrisscross »

jaggederest wrote: post #10
nxobject wrote: post #4

If you want a vivid illustration (from an adjacent state) about the impact of pessimistic fiscal projections: Oregon has an infamous "kicker" law that refunds income taxes collected in excess of projections (plus a 2% margin). The state faces the same budgetary challenges as California... but can't project too pessimistically lest it leave money off the table.

Oregon's kicker law is a textbook example of bad economic policy, sadly. It essentially means that in boom years the state can't accumulate any general funds for recessions, which is half of the point of a state-level political entity in the first place. Balanced budgets and pay as you go are fabulous over the medium term, but over the short term of a year or two during a disaster or recession, governmental spending…

> in boom years the state can't accumulate any general funds for recessions

Genuine question: have states had the discipline not to raid these coffers in the boom years?

The alternative is borrowing in downturns. That works because during recessions interest rates are low. The opposite problem then manifests, however, which is the state continuing to borrow through the recovery.

Maybe instead of citing shortfalls and surpluses, such laws should cite unemployment and income growth.

Re: California has more money than projected after admin miscalculated state budget

#50

Post by reassess_blind »

mistrial9 wrote: post #47
reassess_blind wrote: post #46

Earlier quoted context omitted.

Not to mention there are more students.

in California there are not more students.. all tiers of schools show falling enrollments, year after year. Except community colleges, where they have discovered that more than 15% of all students are ghost enrolled. -- California K-12 public school enrollment fell by 74,961 students (a 1.3% decline) for the 2025-26 school year, marking the largest drop since the pandemic. This loss was significantly higher than the…

That's surprising. Surely there are still more than there were 30 years ago?
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